Homebreadcumb forward arrow iconBlogbreadcumb forward arrow iconSoftware Developmentbreadcumb forward arrow iconWhat is Azure? How does it work & Why does it matter?

What is Azure? How does it work & Why does it matter?

Last updated:
8th Sep, 2023
Read Time
9 Mins
share image icon
In this article
Chevron in toc
View All
What is Azure? How does it work & Why does it matter?

In an age where data is the new gold and cloud computing the treasure trove, understanding the nuances of platforms like Microsoft Azure becomes imperative. So, what is Azure? How does it work, and why does it matter? You may ponder these questions as a professional looking to upskill or reskill. 

In this blog, we will dive deep into the intricacies of Azure, explore its significance for businesses and individuals alike, and dissect its financial and operational impact. Whether you’re an IT professional, a data scientist, or a business leader, Azure has something to offer everyone.

Understanding Microsoft Azure and Its Significance

Microsoft Azure, commonly known as Azure, is a cloud computing platform and service created by Microsoft. Azure provides a broad spectrum of services, including computing, storage, databases, networking, analytics, and Internet of Things (IoT), among many others. But why should you, as a professional, care about Azure? Let’s break it down:

  • Computing Power: Azure provides Virtual Machines (VMs) that can be tailored to specific tasks and workloads. This makes it highly efficient for large-scale computing processes.
  • Versatile Storage Options: With Azure, you can choose from different types of storage depending on your needs. Azure has you covered, whether blob storage for unstructured data or table storage for semi-structured data.
  • Networking Capabilities: The platform offers various networking services like Virtual Networks and Azure DNS for various networking needs. This makes Azure a robust solution for any networking challenge you might face.
  • Integrated Analytics and AI Services: One of the standout features of the various Azure services is the provision for integrating analytics and AI into your existing data and applications.
  • Cross-Platform Compatibility: Azure is built to be cross-platform compatible. You can build Windows and Linux-based applications without any hassle.
ComponentFunctionWhy It’s Important
Computing PowerTailored VMsAllows for large-scale, efficient computing.
Storage OptionsVariety of ChoicesSuitable for different data types, offering flexibility.
NetworkingRobust ServicesMeets a range of networking requirements from DNS to virtual networks.
Analytics & AIIntegrated ServicesSimplifies the process of adding analytics and AI capabilities to your applications.
Cross-CompatibilityWindows & LinuxFlexibility in developing and deploying applications across different operating systems.

The Financial Impact of Azure on Microsoft

Azure plays a pivotal role in Microsoft’s overall revenue landscape. For fiscal year 2023, Azure and other cloud services carved out a whopping 27% of Microsoft’s total revenue. Given the intensifying competitive scenario in cloud computing, Azure has managed to sustain a high growth rate, consistently achieving double-digit year-on-year expansion.

Ads of upGrad blog
  • Revenue Share: During an analyst conference call, Microsoft’s CEO Satya Nadella revealed that while the company doesn’t disclose Azure’s quarterly revenue in monetary terms, Microsoft Cloud has exceeded an annual revenue of $110 billion. This marks a 27% growth when adjusted for currency fluctuations, and for the first time, Azure made up over half of that total revenue. This is not mere statistics; it’s a testament to how indispensable Azure is to Microsoft’s fiscal health.
  • Growth Rate: When we talk about growth, Azure has been soaring. Amidst this fast-paced expansion, Azure is fast becoming the gold standard in cloud services, reflecting its popularity and indispensability in Microsoft’s long-term strategy.
  • Enterprise Adoption: Azure is the go-to platform for heavyweight businesses, boasting a 95% adoption rate among Fortune 500 companies. This almost universal embracement is an undeniable indicator of Azure’s high level of trust, security, and functionality, elements quintessential for enterprise-level operations.

What’s more, Azure is not merely a sideline venture for Microsoft; it’s the company’s beacon for their road map in the cloud ecosystem. In short, Azure is not just a service, but a cornerstone in Microsoft’s valuation, and its key role in Microsoft’s strategic migration into the cloud ecosystem is indisputable. Azure is also leading the way in Microsoft’s foray into new territories, including computer services in Azure and innovations around the concept of ‘what is Microsoft Azure in cloud computing’. 

These pioneering efforts underscore ‘how does Microsoft Azure work’ to benefit the company, and they contribute to the broader conversation around the benefits of Microsoft Azure, which many other platforms find hard to match. By all measures, whether revenue share, growth trajectory, or enterprise adoption, Azure is a monumental pillar in Microsoft’s portfolio, driving the company’s present success and future ambitions.

Check out our free technology courses to get an edge over the competition.

Read our Popular Articles related to Software Development

What Is Microsoft Azure Cloud Services?

If you’re wondering ‘what is Azure services’, then here’s your answer. Azure Cloud is not just a service, it’s a comprehensive suite of solutions that provides a flexible and scalable environment for businesses and developers. To truly understand Azure’s capabilities, it’s important to delve into its architectural mechanics, designed for scalability and reliability.

Azure relies heavily on a technology called virtualisation. Virtualisation decouples the computer’s CPU from its operating system, allowing multiple operating systems to share a single hardware host. This is made possible through an abstraction layer known as the hypervisor.

Hypervisor: The Heart of Virtualisation

In Azure, the hypervisor plays a crucial role by managing the virtual machines (VMs) on the physical hardware. It enables Azure to offer various computing services, from simple virtual machines to complex machine learning algorithms. The hypervisor efficiently manages VMs and contributes to Azure’s reliability and scalability.

Data Centres: The Spinal Cord of Azure’s Global Infrastructure

Azure’s global reach is maintained by its expansive data centres situated strategically across the globe. This global presence not only ensures low latency but also provides robust disaster recovery solutions. The data centres are built to scale as the demand for Microsoft Azure services grows, making it an ideal solution for businesses with international scope. They also offer a wide range of types of storage in Azure, catering to various business needs.

Resource Manager: The Brain Behind Resource Allocation

The Azure Resource Manager plays a pivotal role in application management. It allows developers and IT professionals to manage and visualise resources in your applications in a consolidated view. Azure Resource Manager provides templates that can be decoded as a JSON file defining the resources you need for your application. This feature contributes to the simplicity of what is Microsoft Azure used for, streamlining various processes that might otherwise be cumbersome.

Unveiling the Different Microsoft Azure Services 

Computer Services 

This is where Azure shines. Whether you’re running Windows or Linux, Azure has got you covered. From simple web-based applications to complex machine learning models, Azure’s computing power is diverse and scalable.

  • Virtual Machines: Deploy Windows or Linux VMs.
  • Azure Kubernetes Service: Highly scalable container orchestration service.
  • Azure Functions: Execute code in response to events.


Azure provides robust networking capabilities, including isolated and highly secure application environments.

  • Virtual Networks: For isolated, private environments.
  • Azure CDN: For content delivery and load balancing.
  • ExpressRoute: Private, fast, and secure data residency and encryption capabilities.


Data storage in Azure is flexible and offers a range of options to suit your specific requirements.

  • Blob Storage: For unstructured data like documents and media files.
  • Disk Storage: High-performance, durable block storage.
  • File Storage: Simple, secure, and fully managed file shares.

Check Out upGrad’s Software Development Courses to upskill yourself.

Explore Our Software Development Free Courses

Practical Applications of Microsoft Azure

Ads of upGrad blog

When professionals hear about Microsoft Azure cloud computing, they associate it with data storage. However, it goes well beyond that. It offers many practical applications that cater to various business needs, thereby proving what is Microsoft Azure used for extends far beyond storage.

  1. Web Hosting with Azure App Services: This feature allows you to effortlessly host web apps, RESTful APIs, and mobile backends. You can develop in your preferred language, be it .NET, Java, .NET Core, Ruby, PHP, Node.js, or Python.
  2. Big Data & Analytics with Azure HDInsight: This fully-managed Azure cloud service simplifies the complexities of processing large amounts of data. It offers various big data analytics services like Apache Spark and Hadoop.
  3. Internet of Things (IoT) with Azure IoT Suite: With features like IoT Hub, Azure Stream Analytics, and Azure Machine Learning, this suite provides an end-to-end system to improve your business operations by connecting multiple devices.
  4. Machine Learning and Advanced Analytics with Azure Machine Learning Studio: Whether you’re a novice or an expert in machine learning, this platform provides a range of tools and a gallery of sample experiments to assist you in creating, managing, and deploying machine learning models.

In-Demand Software Development Skills

Advantages of Using Microsoft Azure

When selecting a cloud service, professionals often look beyond storage options and computing power. In a highly competitive market, Microsoft Azure stands out for the comprehensive benefits it brings to the table. It’s essential to understand that Azure is not just about providing cloud space; it’s about offering an all-encompassing environment that bolsters business growth. Let’s dive into the details.

  • Flexibility: Microsoft Azure cloud computing offers unparalleled flexibility, allowing businesses to deploy and manage applications quickly. Whether you are a solo developer or part of a multinational enterprise, Microsoft Azure services and languages allow you to build apps the way you want, using tools you are comfortable with. In other words, Azure allows you to customise your approach depending on what is Microsoft Azure used for in your specific scenario.
  • Scalability: One of the core advantages of Azure is its scalability, which is especially crucial for businesses in growth phases. Azure’s Auto-Scaling feature lets you automatically adjust resources with demand, so you only pay for what you use. This automated scalability is also linked to performance improvements, as Azure optimally distributes resources. When evaluating what is Azure used for, the scalability feature makes a strong case for enterprises looking for long-term solutions.
  • Security: Azure takes security very seriously and provides comprehensive security features to detect and protect against threats. It uses various security technologies and unique threat intelligence to identify evolving risks. This solid security framework makes it one of the best platforms for businesses concerned about cyber threats. 
  • Cost-Effectiveness: Azure’s Pay-As-You-Go model brings down upfront costs and enables businesses to pay only for the services they consume. The total cost of ownership becomes substantially lower, making it an economical option without compromising on features.
BenefitDescriptionWhy It Matters
FlexibilityQuick application deployment and managementCustomise your solutions, no one-size-fits-all
ScalabilityAuto-scaling depending on demandPay for only what you use; optimal resource utilisation
SecurityComprehensive cybersecurity measuresProtect against a wide array of digital threats
Cost-EffectivePay-As-You-Go modelReduced upfront costs, making it economically viable


In this blog, we delved into the multifaceted world of Microsoft Azure. From its basic offerings to how it is a critical business tool, Azure is more than just a cloud service. For those looking to upskill or reskill in cloud computing, understanding Azure is fundamental to staying relevant in the ever-changing tech landscape.


Pavan Vadapalli

Blog Author
Director of Engineering @ upGrad. Motivated to leverage technology to solve problems. Seasoned leader for startups and fast moving orgs. Working on solving problems of scale and long term technology strategy.

Frequently Asked Questions (FAQs)

1What is AWS vs. Azure?

AWS and Azure are leading cloud service providers, but Azure offers better integration with Microsoft-based enterprise environments.

2Does Azure require coding?

While you can benefit from Azure without coding, mastering its services requires some programming knowledge.

3What is Microsoft Azure cloud services?

Azure is a comprehensive cloud platform for hosting applications, data storage, and advanced analytics.

4Is Azure and Cloud the same?

No, Azure is a cloud service provided by Microsoft. Cloud computing is the broader category that Azure falls under.

5What are two benefits of cloud computing Azure?

Two key benefits of cloud computing Azure are scalability and cost-effectiveness. Azure's Auto-Scaling feature allows businesses to adjust resources based on demand, ensuring you pay only for what you use. The Pay-As-You-Go pricing model also minimises upfront costs, making Azure an economically viable choice for various applications.